7 WAYS TO FINANCIALLY SAFEGUARD YOUR BUSINESS DURING COVID-19
As we brace for the impact that the global pandemic COVID-19 may have on our businesses and our economy, we urge you to take a deep breath and to focus your energy and attention on the things that you can control – rather than the things you cannot.
Below, we've compiled a list of seven financial priorities that you can review now to help maintain the financial sustainability of your business during these uncertain times.
Ensure you have a clear understanding of your current cash flow position and project this for the next 6 months. Stress test these projections (i.e. reduce the amount of sales you expect to receive) to ensure you can plan for any possible changes in income.
- Stress test your cash flow
Take a look at your outgoings for the next 6-12 months and re-evaluate your break-even point. Can you reduce any of these outgoings? What goals do you need to set to ensure you are reaching your break-even point?
- Review your outgoings
Many institutions are taking action to support businesses and their associated loans through this time. Speak with your bank about what measures can be put in place in the event you need to defer loan payments or seek other relaxations.
- Speak with your bank
The Australian Government has announced a $17.6 billion investment package to support the economy as we brace for the impact of the coronavirus. Even though the Stimulus Package is not yet legislated, click here to gain a greater understanding of how it works and can affect your business.
- Review the Australian Government's Stimulus Package
Remember that if your clients don't pay you in a time of economic stress, they can severely impact your business. Request payment up-front from past offenders.
- Collect debtors and don't extend credit to known problem clients
Now is the time to avoid panicking and enlighten your team that any steps you take are precautions or reactions to ensure financial sustainability. Reassure your team that this will pass, and things will get better over time.
- Positive forecasting
Bear in mind that in the midst of every crisis, lies the opportunity to potentially propel your business.
"When written in Chinese, the word 'crisis' is composed of two characters. One represents danger and the other represents opportunity." – John F. Kennedy.
If you have any further questions about how your business should be responding financially to the coronavirus or the Stimulus Package, please get in touch with us today.
- The silver lining